The imbalance in EU-China trade is not limited to the automotive industry, as the agreement reached on restricting the import of hybrid cars is just the first step in addressing the issue, according to European Union Commissioner for Economic Affairs Valdis Dombrovskis. In an interview in Bangkok on Tuesday, Dombrovskis emphasized the need to continue working in different areas to address the trade imbalance with China.
The EU had a trade deficit of around 360 billion euros (~403 billion USD) with China in 2025, amounting to almost 1 billion euros in deficit per day. Dombrovskis highlighted the urgency of restoring trade balance, stating that the current relationship is extremely imbalanced and unsustainable.
Last week, the EU and China held talks in Brussels and reached a 16-point consensus covering trade, investment, export controls, and intellectual property rights. As part of the agreement, the EU will limit the import of Chinese hybrid cars to 350,000 vehicles annually. This quota will go into effect in 2027 and increase by 6% each year after the second year.
The agreement also includes providing more opportunities for European companies to enter the Chinese market. European leaders are expected to discuss proposals from Germany and France at a summit in Brussels later this week, which suggest granting the EU new powers to exclude products from China or other countries from the EU’s single market.
Dombrovskis has expressed caution towards implementing additional measures and emphasized the importance of dialogue and negotiation to find solutions. He pointed out that while the EU has various tools at its disposal, unilateral actions could complicate the situation.
However, Dombrovskis noted that the EU is prepared to use trade defense measures if necessary, should progress not be made swiftly through discussions. As the EU continues to navigate the complexities of its trade relationship with China, the focus remains on seeking mutually beneficial solutions through dialogue and cooperation.